XML 28 R18.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The gross liability for unrecognized tax benefits at March 31, 2023 and December 31, 2022 was $15,984 and $15,204, respectively, exclusive of interest and penalties, of which $15,299 and $14,431 would affect the effective tax rate if the Company were to recognize the tax benefit.
The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. As of March 31, 2023 and December 31, 2022, the combined amount of accrued interest and penalties related to tax positions taken on tax returns was $1,344 and $1,118, respectively.
March 31, 2023December 31, 2022
Gross liability for unrecognized tax benefits, exclusive of interest and penalties$15,984 $15,204 
Interest and penalties on unrecognized benefits1,344 1,118 
Total gross uncertain tax positions$17,328 $16,322 
Amount included in Current liabilities$4,133 $4,065 
Amount included in Other long-term liabilities13,195 12,257 
$17,328 $16,322 
The effective income tax rate for the three months ended March 31, 2023 and 2022 differs from the federal income tax statutory rate due to the following:
Three Months Ended March 31,
20232022
Statutory rate21.0 %21.0 %
State taxes, net of federal tax benefit2.9 2.9 
Foreign tax expense and tax rate differential(0.1)(0.1)
Tax benefit from stock option exercises(0.2)(0.4)
Other, net— (0.3)
23.6 %23.1 %
The increase in the Company's effective tax rate for the three months ended March 31, 2023 was primarily due to decreased tax benefits related to the lower volume of stock option exercises and a decrease in credits associated with research and development as compared to the prior year period.
The Company files income tax returns in the United States on a consolidated basis and in many U.S. state and foreign jurisdictions. The Company is subject to examination of income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. The Company is no longer subject to U.S. federal income tax examination for
years before 2019 and is no longer subject to state, local or foreign income tax examinations by authorities for years before 2015.
The Company estimates it will recognize $4,133 of gross unrecognized tax benefits. This amount is expected to be paid within one year or to be removed at the expiration of the statute of limitations and resolution of income tax audits and is netted against the current payable account. These unrecognized tax benefits are related to tax positions taken on certain federal, state, and foreign tax returns. However, the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. While it is reasonably possible that some issues under examination could be resolved in the next twelve months, based upon the current facts and circumstances, the Company cannot reasonably estimate the timing of such resolution or the total range of potential changes as it relates to the current unrecognized tax benefits that are recorded as part of the Company’s financial statements.